ET had reported in July that OYO Rooms was raising a fresh round of funding worth Rs 413 crore through a proposed right issue of shares to existing shareholders. The new round of funding was expected to peg the post-money valuation of the Gurugram-based startup at Rs 3,129 crore or about $460 million.

OYO was also looking to buy back shares worth Rs 60 crore from certain investors while not disclosing the selling shareholder at the time, ET had reported in July.

In addition to this financing, the company is now reportedly looking to raise $29 million (around Rs 194 crore) in a mixture of equity & debt from existing investors apart from picking up $5 million in debt financing from InnoVen Capital, as per a Times of India report.

The report adds that VentureNursery, the first investor in Oyo Rooms, has sold its stake in the company for Rs 60 crore following disagreement with the OYO management.

ET had reported in April that Mumbai-based VentureNursery was looking for an exit and was against the acquisition of rival Zo Rooms, which eventually became one of the reasons why the deal was stalled.

The new capital infusion is expected to help OYO expand its new initiative called "Flagship", where it controls 100% of the hotel inventory to provide a more premium experience to customers. Sources had previously told ET that the company is planning to focus more on this new flagship category which was introduced earlier this year.

Last month, rival Treebo Hotels had also raised Rs 112 crore in a new funding round led by Bertelsmann India Investments (BII) with participation of existing investors SAIF Partners and Matrix Partners India.